Mittal shutdown postponed; ArcelorMittal has announced that their planned shutdown at the Newcastle Furnace has been delayed till the end of March.
The announcement comes after the mill decided to build up steel supplies to carry the industry over the three months that it will be in care and maintenance.
There is the rising concern that South Africa will once again face a shortage of steel at the beginning of the second quarter going into Q3 due to Mittal’s shutdown as well as price increases to go along with the shortage.
Please be mindful of the shutdown and plan accordingly.
Global steel prices expected to remain elevated in 2022, players within the steel sector are becoming increasingly cautious in their purchasing requirements. The forward view on global prices is, gradually, turning more negative, particularly for coil products. The record high values reached towards the end of 2021 took many by surprise.
The peak of the price highs occurred at differing points in each region. European prices peaked at their highest level in June of 2021, while those in North America peaked in September as Asian prices levelled off.
The outlook for the start of 2022 is clouded again by Covid-19 sweeping across the globe. The ominous Omicron variant perhaps slowed the recovery in the steel market.
Prices are expected to find support above historical averages, due to increased mill input expenditure and moves to decarbonise the industry. The economic outlook for 2022 is also relatively strong. This is despite downside risks associated with new Covid variants and the expected tightening of monetary and fiscal policy in many countries.
Supply chain shortages are still disrupting the global steel market and are preventing a strong recovery in 2022. Due to the backlogged steel orders, the demand will remain high throughout the year.
Because of the demand for the limited inventory available, steel prices will continue to go up in 2022. The U.S. steel industry is currently valued at $180 billion and began to boom in 2020 thanks to the disruptions caused by COVID-19.
Increased business and consumer spending habits have driven up the demand for steel-bearing products, which are needed for everything from vehicles to food cans. Buyers in some instances are willing to pay more for these products and will continue to pay increased prices throughout 2022.
ATDF, again denies protest, The Port of Richards Bay was the scene of a peaceful, albeit illegal, protest against the employment of undocumented foreign truck drivers on Thursday morning as protesters pulled over several truck drivers before the police intervened.
Upon arrival at the scene, SAPS spoke to a person who was identified as the leader of ATDF on site however, the secretary for the All Truck Drivers’ Forum, Sifiso Nyathi, said the organisation had nothing to do with the protest and that it appeared that unemployed people were using the name, although they had no affiliation to the forum.
Nyathi said the ATDF would oppose the hiring of illegal immigrants via formal, legal channels. Forums have been set up to engage with all relevant parties and government authorities and hopefully it will result in a workable policy that allows the industry to move forward in a positive and safe way.
Airfreight on a tricky path, spike in demand, soaring rates, and a tricky balance between certain markets remaining closed to curb Covid and others reopening to global trade, necessitate fine footwork from the airfreight sector.
The current situation of high demand and even higher rates was expected to last for the duration of the 1st quarter, before tapering off in Q2.
At least that’s what Aero Africa is hoping for, that there’s respite for shippers somewhere in the near future.
Until then, the struggle to find space and allocation for clients in a confined market continued, especially out of China.
Snags on the ocean side are fuelling an overflow of critical orders to air, sustaining demand, but capacity into Africa and its important sub-Saharan transhipment hub of South Africa remained a problem.
South Africa’s block space agreement out of China is on hold because the carriers are on hold, China cannot commit to freighters in South Africa because they are going into the US where the yield is better and as a result, options out of China have become few and far between, with agents fighting for space that is often elsewhere allocated because of market dynamics which is attributed to the strength of the dollar and the primacy of American imports to name a few.
Ocean freight costs expected to remain high throughout 2022, Shipping rates are expected to stay elevated well into 2022, setting up another year of booming profits for global cargo carriers.
The spot rate for a 40-foot container to the US from Asia peaked at just over US$20,000 last year up from less than US$2,000 a few years ago and was recently hovering near US$14,000.
Tight container capacity and port congestion also mean that longer-term rates set in contracts between carriers and shippers are running at around 200% higher than a year ago, which signals that elevated prices are here to stay for the foreseeable future.
Larger customers like retail or tech giants have the power to negotiate better terms in those deals or absorb the added expenses whereas the smaller importers and exporters that rely on carriers to haul everything from electronics and apparel to grains and chemicals, cannot easily pass those costs along or weather long periods of stretched cash flows.
Regulators from the US, the EU and China met in September and determined there was so far no evidence of anti-competitive behaviour in container shipping. Governments are on high alert as global supply chains are being pushed to the breaking point.
The US Federal Maritime Commission says it has increased monitoring of carrier alliances, to better track trends and spot potential illegal behaviour, such as artificially limiting supply or not competing on prices.
Zambia to continue with plans to sell KCM, Zambia’s state-appointed liquidator who is managing the affairs of KCM said he would proceed with the dismantling of the company and the sale of its assets.
This was after the Lusaka Court of Appeal earlier this month declined to discharge the liquidator, Milingo Lungu, despite ruling earlier that he should arbitrate a dispute with KCM’s majority shareholder, Vedanta Resources.
ZCCM Investment Holdings, a 20.6% stake holder in KCM, applied to put the company into provisional liquidation in 2019. Vedanta argued the step was unlawful as there were conditions in their shareholders’ agreement allowing for dispute resolution.
ZCCM said Vedanta had failed to invest in KCM’s assets and had not paid dividends as previously promised.
Despite being asked to enter into arbitration proceedings with Vedanta, Lungu said that he would divide KCM into halves, effective January 31, and then embark on an asset disposal programme.
Zimplats allowed to set up solar plants. The Zimbabwe Energy Regulatory Authority announced on Friday that it had granted Zimplats a licence to construct, own, operate and maintain a 105 MW solar power plant at Ngezi Mine.
A similar notice was also published but this time for the generation of an 80 MW solar power plant at Zimplats’ Selous Mine in Chegutu.
Zimplats says setting up the two power plants will cost the company as much as $201 million.
Zimplats is not the only miner that has turned to solar power as gold miner Caledonia Mining, which runs Blanket Mine in Zimbabwe is constructing a 12 MW solar plant which is expected to be operational this year and will exclusively supply Blanket with approximately 27% of its daily electricity usage.
Copper prices on the rise, the copper price rose on Wednesday, supported by expectations of further policy easing in China.
March delivery contracts were exchanging hands for $9,856/tonne on the Comex market in New York, up 2.3% compared to Tuesday’s closing.
The most-traded March copper contract on the Shanghai Futures Exchange was steady at $11,026.46/tonne.
China, the world’s biggest buyer of metals, has been stuck in a property market slump, credit stress and repeated virus outbreaks. In response, the central bank this week cut its policy interest rate for the first time in almost two years, signalling the beginning of an easing cycle.
China’s copper exports rose to an annual record of 932,451 tonnes in 2021, according to customs data.
Gold also rose to its highest in two months this past Wednesday.
Fears that insurgents planning more attacks in Cabo Delgado, The SADC has warned that insurgents are regrouping for more coordinated attacks.
While SADC has noted considerable gains in Cabo Delgado, there are genuine fears that insurgents have withdrawn to regroup and are planning rejuvenated attacks.
“The insurgency is not yet neutralised. The violent extremists are regrouping, launching attacks from several parts of Cabo Delgado and they are also expanding to neighbouring province Niassa where they have launched significant attacks,” said Professor Adriano Nuvunga – the Director of the Centre for Democracy and Development.
SADC sent in its Standby force into Mozambique’s gas-oil rich Cabo Delgado in July last year, a month after Rwanda sent in troops.
At the onset of the SADC Mission in Mozambique, Nuvunga said the insurgents were disbanding. However, six months later, they had changed their strategy.
At the beginning of the deployment, the country saw violent extremists disbanding. Now they have seen them regroup and move in terms of recruitment.
On December 15 last year, Islamic extremists in Nova Zambezia, Macomia district, beheaded a pastor and instructed his wife to take his head to the police with a message: “While you [government forces] are walking on tarred roads, real men [insurgents] are in the woods.”
As a show of power, the insurgents operating from the bush ambushed SAMIM forces in the east of Chai in the northern Macomia district on the night of December 19, resulting in the death of a South African soldier.
Intel also suggests that the insurgents have support within the communities they operate, with some civilians assisting them in transporting arms.
Since the insurgency began in 2017, there have been 1,111 cases of political violence with 3,627 reported fatalities during these attacks and 1,587 reported fatalities from violence targeting civilians.
“Great things are done by a series of small things brought together.”